There is one major news now in the investor community. Yes Bank Crisis. RBI has put a moratorium on Yes Bank, where account holders can withdraw only upto Rs 50,000. It also indicated that all debt papers / bonds has no value now. RBI has put several restrictions on Yes Bank, where several mutual fund schemes also would get affected. In this article, we would provide the list of mutual fund schemes that affected by Yes Bank Scam and what an investor do in this crisis.

Yes Bank has been facing crisis in the last few years due to bad loans.

Like any other bank, Yes Bank has given loans to its customers. However, there was a crisis of non-performing assets. Some of them became bad loans and many loans, there are repayment delays. The bank has been looking for investors and hunting for cash to come out this crisis. However, there were no investors. On top of this, Yes Bank faced governance issues. As per an analysis, it under reported Non Performing Assets (NPAs) to the tune of Rs 3,300 Crores in FY2018-19.

Finally RBI has concluded that there was no proper plan from Yes Bank to come out such crisis and finally imposed moratorium on Yes Bank.

What is RBI Moratorium on Yes Bank?

RBI has put some restrictions on Yes Bank through moratorium.

1) Account holders would be able to withdraw up to Rs 50,000 from their account.

2) The cap on withdrawal is exempted and you can withdraw up to maximum limit of Rs 5 lakh in the following scenarios. RBI approval is required for this.

To pay for medical treatment

To cover higher education costs, in India or abroad

To pay for “obligatory expenses” for a wedding or other ceremonies

In “any other unavoidable emergency”

3) RBI has suspended current Yes Bank Board.

4) RBI indicated that salaries of the 20,000 Yes Bank employees would be paid in normal.

List of Mutual Fund schemes that have invested in Yes Bank Bonds

MFs keep investing in corporate / bank bonds and debt papers. Since credit rating agencies would downgrade ratings of Yes bank, the underlying paper value would be reduced. Mutual Fund schemes would mark down the value of such investments and this would show a decline in the value of the NAV. Here is the list of mutual fund schemes that invested in Yes Bank debt papers and bonds as of end of Jan-2020. Some of them would have exited in the last few days.

Fund Name

Market Value (in Rs. cr)

Nippon India Equity Hybrid Fund

637.8

Nippon India Credit Risk Fund

540.1

Nippon India Strategic Debt Fund

436.3

Franklin India ST Income Plan

281.1

Franklin India Credit Risk Fund

135.2

UTI ULIP

128.3

Nippon India Hybrid Bond Fund

102.7

UTI Credit Risk Fund

71.3

UTI CCF - Savings Plan

71.3

Kotak Credit Risk Fund

63

Franklin India Dynamic Accrual Fund

54.4

Nippon India Equity Savings Fund

53.3

Nippon India Retirement Fund-Wealth Creation

36

Kotak Medium Term Fund

30.8

Baroda Treasury Adv Fund

24.1

UTI Hybrid Equity Fund

22.5

PGIM India Credit Risk Fund

21.9

Baroda Credit Risk Fund-A

18

UTI Medium Term Fund (Segregated - 17022020)

7.4

UTI Medium Term Fund

7.4

IDBI Credit Risk Fund

7.2

Franklin India Debt Hybrid Fund

5

L&T Resurgent India Bond Fund

5

Sundaram Equity Hybrid Fund

5

Baroda Hybrid Equity Fund

4.3

Baroda Dynamic Equity Fund

3.6

Baroda Equity Savings Fund

3.6

Mahindra Credit Risk Yojana

1.6

Which mutual fund house has the highest impact?

There are total of 32 mutual fund schemes that has invested in Yes Bank bonds to the tune of Rs 2,848 Crores.

Out of this, 28 schemes have exposure to the tune of Rs 2,779 Crores in perpetual bonds that has no maturity date.

There is little you can do now. The mutual funds that invested in Yes Bank bonds are already marked down. Even if you want to sell them now, the NAV is already reduced. Hence, you would get lower amount. RBI is proposing a revival plan for Yes Bank. SBI and LIC are planning to invest in Yes Bank now. Once we get clarity on the resolution plan, investors should review and take a decision about selling their funds.

If your mutual fund account is linked to Yes Bank, you should link to other banks immediately so that mutual fund redemptions would get credited in non Yes Bank account.

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Suresh KP

List of Mutual Fund Schemes effected with Yes Bank Crisis – What investors do now

I have done my Post Graduation in Finance. I have over 20 years of experience in analyzing various investment options and money saving ideas. I love doing financial planning, Mutual Fund Analysis, Searching long term Stocks for wealth creation, IPO Reviews, Analyzing Life Insurance and Health insurance Plans etc.

Hello Raja, While RBI has indicated that debt bonds invested by mutual funds in Yes Bank carry zero value, many mutual fund managers along with AMFI are fighting with RBI to get back their money. You should wait till we get this clarity.